How can I raise $50K to finance my first deal?

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How can I raise $50K to finance my first deal?

Ryan Lauritsen
Warwick, NY · Member since 2015 · 7 posts · 0 votes
So I found a duplex I would like to purchase. I have the cash, but it is tied up for other purposes that I can not use right now. I would really hate to pass up this investment. The down payment would be about $50K. So my question is what are some creative financing that I could do to come up with the money? My credit is fine and should have no problem getting approved for a conventional home loan.
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  • Brad S.
    Investor · Mission Hills, KS · Member since 2015 · 59 posts · 11 votes
    10y
    Ryan Lauritsen I have not done this but here an idea. It depends on the deal, and if numbers work, I would talk to seller if he can loan the down payment at some favorable terms.
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  • Matt Vogt
    Investor · LaGrange GA · Member since 2014 · 121 posts · 55 votes
    10y

    How much is the property? I assume its more than the 50K needed down (typically 20-25% down), so maybe 200-250K? 

    Are you trying to finance it with conventional financing and just need the down payment? If so, that's probably going to be an issue for a lender to see borrowed funds used for the down payment. Banks look for the funds to be in your possession for at least 2 months for conventional financing. 

    Maybe you could do a hard money lender, explain that you'll need 6 months to get it re-fied and go from there? Alternatively, do you have a 401K you can borrow against, friends with 401k's, parents that have idle cash, etc? Do you own another property that you could pull equity out of? When all else fails, turn to friends, family, and anybody else you can round up to borrow cash from. 

    Good luck

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  • Ryan Lauritsen
    OP
    Warwick, NY · Member since 2015 · 7 posts · 0 votes
    10y

    Yes Matt , I just need the down payment. The property is listed for $270K. I hear about all these deals where investors put no money into the deal. I really would only need to borrow the money for about six months until I could pay it back.

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  • Albert Bui
    Lender · Bellevue WA & Orange County, CA · Member since 2013 · 2k+ posts · 1k+ votes
    10y

    If you're looking for conventional financing you'll want funds from sources you "can" use.

    Were you intending to get commercial portfolio financing, conventional, seller carry, or other? Where is the other 80% are coming from?

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  • Arpan Patel
    Investor · Chicago, IL · Member since 2010 · 504 posts · 191 votes
    10y

    Partner? Seller Carry Back with a non conventional lender? Hard Money with lower LTV requirements? There are a lot options but if this if one of your first deals, you will more than likely need to put some money in the deal. Have you read the book on No and Low money down? Maybe you will find an answer in there.

    -AP

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  • Chris SeveneyBusiness Member
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    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    10y
    If your money it tied up in another property then you could either refinance it from their or if you own it free and clear a private lender would provide the money using the other property as leverage (if it could be in a 1st position). If it is not in a 1st position you could get the funds but you would be paying 3-5 points and a rate in the Teens.
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